Streaming music services have got off to a bad start with artists and other rights holders (composers, publishers etc). Several failed long before making any meaningful pay-outs to rights holders (e.g. Spiral Frog, Imeem), some were taken over before they could prove their business models and pay anything out (e.g. Lala) and those that have apparently been successful are criticised for the paucity of payments made (e.g. Spotify, Deezer or even YouTube).
There’s been a long-running spat between songwriters and Spotify over pay-out rates, triggered by a 2009 blog post which extracted data from the Swedish performing rights society (STIM) to show that Lady Gaga had received $167 payment as co-composer of ‘Poker Face’ (this doesn’t include any payment to her as performer, which would have been channelled through the label as master rights holder) from 1,000,000 plays of the song. Whatever the rights and wrongs of whether this is a fair or reasonable level of payment to a composer, the issue is symptomatic of significant disquiet among songwriters. In a BBC interview in 2010, Patrick Rackow, chairman of The British Academy of Songwriters, Composers and Authors (Basca), commented “At the moment, the amounts of money that are actually being received are tiny. That might be because there is no money there. But there is no clear trail that can be established so that the songwriter can trace back what they ought to have got. These things are behind a blanket of secrecy, and that is extremely worrying.”
The songwriters have been joined by some high profile artists as well, including Coldplay according to an article in Friday’s Independent which stated that the band had refused to make ‘Mylo Xyloto’, its latest album, available on Spotify. The article went on to say that the band had given no reason for its refusal but that EMI, Coldplay’s label, were “embarrassed” by the refusal, since it is a 2% shareholder in Spotify.
Whatever the merits and demerits of any particular digital music service whether it’s based on download like iTunes and Amazon, streaming like Napster and Spotify or an internet radio service like We7 or Pandora, it’s clearly sub-optimal to lose the confidence of artists and songwriters. Nothing corrodes that confidence like secrecy and a lack of transparency which imply that the parties to a deal have something to hide. Which goes a long way to explain the chorus of agreement and dismay when Uniform Motion published their Spotify pay-out rates (and the rates they get from all other music sales channels) on Gizmodo.
At Psonar, we have a single tariff structure that is transparent to all and the same for all parties determined only by their role in creating, publishing and distributing that music. Artists can see clearly how much the label, distributor and service provider itself (i.e. Psonar) is getting from each play of a track and since there is no industry ownership of Psonar there is no scope for a conflict of interests to arise.